Do Benjamin Franklin’s famous words, “in this world, nothing can be said to be certain, except death and taxes” hold true? Of course, YES!! What about death taxes? Are they inevitable too?
It depends…WHAT??
Yes, it specifically depends on three things. First, on the value of your assets. Second, on where you live. Third, on the thoroughness of your estate plan
If you die in 2025 and the value of your assets exceed $13,990,000 (“exemption amount”) (double that for a married couple), estate tax will be due and payable at a rate of 40% on the value exceeding the exemption amount.
Florida does not have a state estate tax, but some jurisdictions do impose their own estate tax and the state exemption amount may be different from the federal exemption amount.
Lastly, if you have not addressed estate taxes and planned for it during your lifetime, you will be stuck with it. I had a wealthy client who owned significant assets (rental real estate including homes and apartments, and a rental strip mall), but was cash poor. He suddenly passed away and a large portion of his assets had to be sold to pay the estate taxes as there was no liquid cash to pay estate taxes.
This could have been avoided had my deceased client planned for estate taxes during his lifetime. We could have created an irrevocable trust for the benefit of his heirs during his lifetime and transferred his assets to the irrevocable trust while their values were low, and all assets were below the exemption amount. There would have been no estate tax implications on his death with proper advance planning.
Any questions? Please contact our office at fatima.hasan@fiducia-law.com
or schedule an initial consultation.
